Economic Tax Research Articles

Increasing Learning Outcomes in Economics with "Eco Tax" Media for Digital Era Students in Malang, Indonesia

This research was carried out on the basis of the use of media that was less than optimal, innovative learning media, and low student learning outcomes, especially during the Covid-19 outbreak at State Senior High School 1 Gondanglegi, Malang Regency. This study aims to develop Android-based ECO-TAX media for the 11th-grade Economics students, majoring in social science, at Gondanglegi 1 Public Senior High School, Malang Regency. The study is expected to improve student learning outcomes. The method used in the study is the ADDIE model research and development (R&D), which comprises five stages, namely (1) analysis, (2) design, (3) development, (4) implementation, and (5) evaluation. Data analysis was carried out quantitatively and descriptively. The results of research and development are in the form of learning media for the Android system in Economics lessons called “ECO-TAX (Economy Tax)”. This media contains materials, learning videos, and learning evaluations, which can be used offline or online by students. The results of the students’ posttest scores showed that there was a striking difference between the learning outcomes of the control class and the experimental class. Android-based ECO-TAX media is effective and feasible to use as an economic learning medium that is proven to be able to improve student learning outcomes. Keywords: learning media, Android, learning outcomes, economics, taxation

From Pixels to Taxes: A Comparative Study of Digital Economy Tax Policies in the Philippines to Selected ASEAN Member States

This research focuses into the proposed Digital Economy Taxation Act, scrutinizing its provisions aimed at bolstering income tax and value-added tax (VAT) compliance. The bill mandates network intermediaries and ecommerce platforms, including those without a physical presence in the country, to act as withholding agents, a move that has sparked debate over its implementation challenges, such as the requirement for non-resident entities to establish a representative office within the Philippines. Utilizing qualitative method through documentary analysis, this study compares the Philippine approach to digital taxation with initiatives undertaken by other ASEAN countries, analyzing literature, articles, reports, blogs, and media releases to gain insights to the regional tax landscape. The paper seeks to uncover the nuances of each country's digital tax policies, focusing on the variance in tax rates and the thresholds set for business registration. The analysis extends to the potential economic impacts of the Digital Economy Taxation Act on the Philippines, considering both the opportunities and complexities posed by its enforcement. The paper underscores the imperative nature of digital taxation in an era increasingly reliant on digital transactions while highlighting the challenges associated with tax collection from non-resident digital service providers. The research provides a comprehensive understanding of the ASEAN digital taxation framework and offer insights into establishing unambiguous rules that ensure effective tax collection without hindering the growth of the burgeoning digital economy.

Analysis of International Disputes over Digital Services Tax and Exploration of China’s Approach

With the continuous emergence of emerging information technologies, the digital economy is developing rapidly around the world. The global operations of multinational digital enterprises no longer rely on physical presence. The effectiveness of permanent establishment rules based on the traditional real economy settings has been questioned by market countries, which actively participate in Market countries where digital business value is created do not receive corresponding taxation rights. Multinational digital companies take advantage of loopholes in digital platforms and current tax rules to actively carry out tax planning, resulting in digital companies’ global tax burden being much lower than that of traditional companies. Tax sources cannot be fairly and reasonably distributed in the places where value is created and profits are taxed, which harms the tax interests of market countries. Against the background of slow progress in the OECD global unified solution, as a temporary unilateral measure to address the challenges of the digital economy, some countries have taken the lead in imposing digital service taxes on specific digital businesses of digital enterprises. On the basis of discussing the relevant concepts and theories of digital service tax, this article discusses the relevant concepts and theories of digital service tax, and analyzes the international development of digital service tax and the positions of various countries around the world. Further analyze the impact of digital service tax collection from three aspects: national fiscal revenue, tax trade disputes and international tax order coordination, and analyze the impact of digital service tax on digital enterprises. Then the perspective is focused on my country, sorting out and summarizing my country's relevant digital economy tax policies, and analyzing the impact of digital service tax on my country in the near term and long term based on the development of my country's digital economy. Finally, based on the previous comparative analysis and impact analysis, my country's tax system for promoting the development of the digital economy has gradually improved and actively participated in the reshaping of international tax rules, and my country's response strategies under the digital service tax have been proposed. The different levels of digital economic development between China and countries that have levied digital service taxes will inevitably lead to disharmony in the international tax order. The study found that the fiscal revenue brought by digital service tax is limited and has a certain degree of distortion effect. It is necessary to actively participate in international cooperation and make China's voice heard before reaching a consensus on international tax rules. In the long term, we should focus on the connection between the two-pillar plan and the domestic tax system, strengthen tax information exchange, improve the domestic digital tax rule system, and promote the healthy and sustainable development of my country's digital economy.

Comment on ‘What taxpayers, governments and tax economists do – and what they should do’

Comment on ‘What taxpayers, governments and tax economists do – and what they should do’

What taxpayers, governments and tax economists do – and what they should do

AbstractThe distinction between positive economics – describing economic programmes, situations and conditions as they exist – and normative economics – prescribing policies – has a long history. It is an especially important distinction in public economics, which by its nature concerns the actions of government. In this essay, I consider how two relatively recent developments in tax economics alter, blur or at least complicate the classic distinctions between positive and normative economics. The two developments I address are the insights generated by the study of behavioural economics and increased attention to tax evasion and tax enforcement. I organise my thoughts by addressing how three sets of actors central to public finance actually behave and should behave – taxpayers, governments and tax economists. I argue that tax economics should take seriously the substantial presence of behavioural anomalies and tax evasion, and that it has already begun to do so. I suggest some directions this effort might profitably take.

Redistributive Regulations and Deadweight Loss

AbstractRedistribution generates equity benefits and deadweight loss. A canonical result in economic theory holds that policymakers generally cannot escape the problem of deadweight loss by redistributing through non-tax rules. Nonetheless, the Office of Management and Budget (OMB) released a revised framework for regulatory analysis in November 2023 that encouraged federal agencies to consider distributional benefits – but not the deadweight loss of redistribution – when choosing which non-tax rules to promulgate. By omitting deadweight loss from distributional analysis, OMB’s framework will lead to inaccurate estimates of the welfare effects of regulatory changes and will leave agencies vulnerable to legal attack on the ground that they have ignored an important aspect of regulatory redistribution in their decision-making. This article illustrates how agencies can incorporate deadweight loss into distributional analysis and thereby place their redistributive rules on firmer economic and legal footing. It shows how the “elasticity of taxable income” approach – widely used by tax economists – can be modified to the regulatory context so that agencies can estimate the deadweight loss of redistributive regulations while incurring relatively modest additional analytical burdens. Explicitly incorporating deadweight loss into distributional analysis will provide the public with a more accurate view of the welfare consequences of regulatory actions and will make regulations more robust to legal challenges.

From climate science to climate action

Abstract Non-technical summary Despite 50 years of good science showing the urgency for action on remedying climate change, the business and political worlds have been exceedingly slow in actualizing climate solutions. Now excess climate-related deaths have mounted to more than 5 million people per year. In this Intelligence Briefing, we identify a few targeted driving actions through economic taxation, ending subsidies, and pursuit of legal cases for climate homicide, among many others. Scientists can play a vital role in providing supporting scientific evidence for policies and prosecutions, and model climate behaviors in their personal and professional lives. Technical summary Based on our analysis of the current global situation regarding carbon (CO2) in the atmosphere, we note that the earth has reached a dangerous 420 ppm, compared to staying under the 350 ppm necessary for human sustainability; and carbon concentration in the atmosphere is still climbing, as fossil fuel firms are continuing to delay and dilute regulatory efforts. This paper suggests action on several fronts. Governments can impose improved taxation regimes that involve unitary, windfall, and luxury taxes on carbon and the consumption of natural assets. Cutting subsidies to fossil fuel firms via COP actions can reduce carbon, by making renewable energy more competitive. We suggest recognizing the excess deaths by carbon pollution as homicide and charging responsible companies as was done in the case of asbestos and tobacco. If timely action is not taken, we caution about the potential rise of climate violence of emerging ‘new politics’ and increased global population displacement. Science, government, and business sectors need to collaborate in transdisciplinary ways to produce further actionable knowledge. Scientists can lead by example by reducing their own carbon footprints. Social media summary Fund climate action by taxing billionaires, eliminating subsidies, and suing fossil companies for climate homicide. The science community is focused on and committed to systems changes – seeking both natural systems, and social and economic systems to be sustainable. Yet systems that are in-place now producing carbon dioxide (herein aka carbon), are not taking adequate scientifically recommended actions; or worse, they are changing in the wrong directions. How can we move from producing more scientific knowledge to science-based actions, and what can scientists do to support such actions? In this Intelligence Briefing, we suggest some pathways for action.

Taxation strategies for the governance of digital business model-An example of China.

The digital business model emerges as a new business model and gradually penetrates global industries, and countries are putting in place various digital strategies to support their development. As one of the important tools, taxation strategies are highly expected by countries, which not only describe the economic development pattern of a country but also show the digital leadership of a country. Some countries have introduced their own unilateral digital services tax to govern their digital business models, while others have looked more to the global minimum tax, resulting in the current situation of both a unilateral digital services tax and a global minimum tax. However, both of them are of great reference value for the tax governance of digital business models. This paper compares the development history of digital tax strategies, categorizes, and analyzes the design logic of existing digital tax strategies, and takes China, one of the major digital economy countries, as an example to propose China’s digital tax strategies by drawing on international experience. We set an example for the design of digital economy tax strategies for countries around the world so that they can manage digital business models more efficiently.

Internal Prices and Optimal Exploitation of Natural Resources

Within the framework of traditional fishery management, we propose an interpretation of natural resource prices. It leads to an economic taxation mechanism based on internal prices and reduces a complex problem of optimal long-term exploitation to a sequence of one-year optimization problems. Internal prices obey natural, economic patterns: the increase in resource amount diminishes taxes, and the rise in the number of “fishers” raises taxes. These taxes stimulate cooperative agent behavior. We consider new problems of optimal fishing, taking into account an adaptive migration of the fish population in two regions. To analyze these problems, we use evolutionary ecology models. We propose a paradoxical method to increase the catch yield through the so-called fish “luring” procedure. In this case, a kind of “giveaway” game occurs, where the region with underfishing becomes more attractive for fish and for catches in the future.

Curvature and competitiveness: Carbon taxes in cattle markets

AbstractEnvironmental regulation can interact with agricultural markets to produce underappreciated competitiveness and leakage effects. This paper measures effective carbon tax stringency by structurally recovering the domestic supply schedule for a trade‐exposed beef cattle industry such that elasticities and carbon tax rates change with product prices (i.e., due to the curvature of the supply function). Two basic propositions from the economics of taxation—that excess burdens increase in elasticities and tax rates—are shown to cause the stringency of uniform carbon policy to vary nonlinearly with output prices. Based on the domestic supply function, the relationship between marginal excess burden, a measure of policy stringency from the industry's perspective, and product prices is estimated. Several policy‐relevant counterfactual scenarios are explored. Results show that with moderately high output prices, supply elasticities are small and the efficiency cost of a $40/tCO2e carbon tax (gross of environmental benefits) is less than $0.01 per dollar tax revenue. As prices decline, supply curves become increasingly elastic and marginal excess burdens grow rapidly.

Digital Economy Tax Compliance Model in Malaysia using Machine Learning Approach

The field of digital economy income tax compliance is still in its infancy. The limited collection of government income taxes has forced the Inland Revenue Board of Malaysia (IRBM) to develop a solution to improve the tax compliance of the digital economy sector so that its taxpayers may report voluntary income or take firm action. The ability to diagnose the taxpayer's compliance will ensure the IRBM effectively collects the income tax and gives revenues to the country. However, it gives challenges in extracting necessary knowledge from a large amount of data, leading to the need for a predictive model to detect the taxpayers' compliance level. This paper proposes the descriptive and predictive analytics models for predicting the digital economic income tax compliance in Malaysia. We conduct descriptive analytics to explore and extract a summary of data for initial understanding. Through a brief description of the descriptive model, the data distribution in a histogram shows that the information extracted can give a clear picture in influencing the results to classify digital economic tax compliance. In predictive modeling, single and ensemble approaches are employed to find the best model and important factors contributing to the incompliance of tax payment among the digital economic retailers. Based on the validation of training data with the presence of seven single classifier algorithms, three performance improvements have been established through ensemble classification, namely wrapper, boosting, and voting methods, and two techniques involving grid search and evolution parameters. The experimental results show that the ensemble method can improve the single classification model's accuracy with the highest classification accuracy of 87.94% compared to the best single classification model. The knowledge analysis phase learns meaningful features and hidden knowledge that could classify the contexts of taxpayers that could potentially influence the degree of tax compliance in the digital economy are categorized. Overall, this collection of information has the potential to help stakeholders make future decisions on the tax compliance of the digital economy.

How Should Taiwanese Enterprises Respond to Global Digital Economy Taxation and the Minimum Tax Plan?

How Should Taiwanese Enterprises Respond to Global Digital Economy Taxation and the Minimum Tax Plan?

A note on optimal taxation, status consumption, and unemployment

Existing research on optimal taxation in economies with status-driven relative consumption (implicitly) assumes that there is no involuntary unemployment, despite ample evidence that real world labor markets are typically characterized by such unemployment. We show how the marginal tax policy ought to be modified to simultaneously account for positional consumption externalities and equilibrium unemployment, and find that interaction effects between these two market failures are crucial determinants of the marginal tax structure. In certain cases, the policy incentive to tax away positional externalities vanishes completely, and negative positional externalities may even lead to lower marginal taxation, under involuntary unemployment.

Developing Countries Put Their Cards on the Table in the Digital Economy Tax Debate – But Is the UN Committee of Experts Playing a Winning Hand?

The 2021 update of the UN Model will include a new article 12B on income from automated digital services. Bob Michel considers whether this represents a gentle nudge of the digital economy debate on the path of a developing country-friendly solution, or an ill-fated attempt to make DSTs tax treaty-proof.

The Importance of Qualitative Research Approaches to Gig Economy Taxation

As the United States tax system continues to grapple with how to tax workers in the gig economy, it confronts a number of questions about the nature and composition of the sector as well as the tax issues confronted by its participants. Many of these questions have proven difficult to answer due to a lack of adequate information. But the answers are important and will shape how tax and other areas of law (such as employment law, labor law, and antitrust) respond to the gig economy. Thus, the question of how to obtain the data and information necessary to formulate sound policies for gig work is vital. This chapter discusses the limitations of quantitative empirical research on the gig economy and argues that incorporating more qualitative approaches will help generate a more comprehensive understanding of the tax policy issues involved. Adoption of a diverse set of research approaches is crucial because the administrative tax return and labor survey data are incomplete and are shaped by prior decisions of gig economy firms and participants. Many questions remain that such quantitative data, by its very nature, cannot answer. This chapter first identifies the key tax issues at stake in the gig economy, including tax administration, worker classification, and tax impacts on workforce decisions. It then discusses the key ways in which quantitative approaches do not fully capture the tax issues at stake. Finally, it details how qualitative research methods such as interviews and case studies can flesh out gaps in the quantitative data, can help interpret quantitative data, and can help answer questions that extend beyond the scope of quantitative data, yielding a richer account of gig economy tax issues than that provided by quantitative tax administrative and labor survey data alone.

The Political Economy of Taxation

The Political Economy of Taxation

Taxing Digital Economy: the End of Optimism

The rapidly developing digital economy seriously affects the tax systems of different countries. At the end of XX century there was an optimistic approach to the taxation of digital economy. It was considered that there is no need for the new taxes, new tax regimes and the traditional concepts of international taxation were expected to sustain the new challenges. It was also considered that even with implementation of new technologies tax rules should keep on being clear and simple with high level of certainty, so that taxpayers could anticipate the tax consequences in advance. The digital economy was supported and exempt from taxation. Nowadays the possibility of imposing the new special taxes on digital economy is considered and some countries already introduced those taxes. The pessimism in respect of digital economy is now prevailing in the tax systems. However, the tightening trend in the tax regimes may entail the discrimination of the new technologies against those, which were developed before and already entered into the markets. The controversies between the technological center and periphery play certain role here. For the countries of technology periphery to join the tightening trend means to curb development of their domestic high-tech industry as discrimination in taxation of foreign countries is still considered inacceptable. It is obvious that the regulatory pendulum: from the most optimistic to the extreme pessimistic approach, until the desperate protectionist measures, should be balanced with the time. The panic in the publications about the prospective of the digital economy taxation shall subside and turn to the constructive suggestions without unnecessary fiscal focus.

Analysis on Tax Collection and Management of Digital Economy

Digital economy is a new form of economic and social development based on a new generation of information technology. The rapid development of cloud computing, Internet of Things, big data, 5G and other information technologies and infrastructure have promoted the rapid development of China's digital economy. Due to the digitization of goods and services and the intangibility of assets in the digital economy model, it has also brought opportunities and challenges to the traditional tax collection and management model. This paper introduces the current scale of China's digital economy and the impact of the digital economy on China's tax collection and administration, clarifies the opportunities and challenges facing China's current tax collection and administration model, and combines the case analysis of China's digital economy tax collection and administration to give corresponding countermeasures and suggestions.

Kantians Defy the Economists’ Mantra of Uniform Pigovian Emissions Taxes

This paper analyzes the efficient emissions taxation in economies with individuals who are morally motivated to reduce their emissions footprint. They are heterogenous with respect to their morality and their consumption preferences. We distinguish between the concepts of moral and conventional utilitarian (= material) welfare. The materially efficient tax rates turn out to be consumer-type specific; they are smaller than the Pigovian tax rate; and the smaller, the higher the individuals’ propensity to act morally. Finally, we briefly characterize the second-best uniform emissions tax.

Digital Economy Taxation - Deconstructing Equalization Levy and GST from an Indian tax standpoint

Digital Economy Taxation - Deconstructing Equalization Levy and GST from an Indian tax standpoint